A little knowledge is a dangerous thing. It can cost you a prospect, a sale and a future. It gives you a woefully incomplete picture of your customers' preferences and purchasing history.
A little knowledge is not enough to market and sell effectively to today's savvy customers who have myriad choices and are flexing their power by demanding better, ever-more-personalized products and services. To believe that genuine customer relationship management (CRM) can be implemented effectively without the benefit of all the relevant knowledge about your customers would be a major mistake.
Therefore, as companies shift from focusing on internal processes and instead begin to concentrate their efforts and resources on customers and markets, applications for CRM, data warehousing and enterprise resource planning (ERP) will need to be rapidly enhanced to meet these changing needs.
The responsibility for building better customer relationships once the exclusive purview of the marketing and sales departments now occurs across the entire enterprise. As a result, companies are taking a hard look at their internal databases and trying to develop processes to leverage the tremendous potential they contain in an effort to become more responsive to their customers.
The goal they seek full customer data integration (CDI) is challenging but highly valuable. "META Group's 1999 Data Warehouse Cost of Owner-ship report, documenting over 400 data warehouse projects, shows the most prominent and high-return subject areas include customer-related information," says Doug Laney, a senior program director with META Group.
Smart businesses realize that within various databases (sales, order administration, billing, contract management and others) they possess a wealth of largely untapped information about their customers. Unfortunately, the technology which would enable them to quickly and cost-effectively obtain and integrate this information simply has not been available until recently. They have been denied the most important result that customer data integration provides a single, unified and accurate view of their customers across the entire organization.
In fact, the growth of disparate databases and the proliferation of incompatible CRM applications have actually produced too many isolated views of the customer a situation which causes confusion instead of clarity.
A recent report by the Aberdeen Group of Boston described the problem this way: As enterprises focus on the customer by implementing multiple CRM systems, they sometimes blur rather than sharpen their view of their customers. Different CRM systems, such as sales force automation, telesales and customer support systems, typically use different keys and look at customers from different points of view. Conse- quently, enterprises find it difficult to connect these disparate data sources in order to create a holistic view of the customer. The resulting customer data balkanization can seriously weaken an enterprise's ability to deliver a single face to the customer and manage the customer relationship effectively.
It is this data "compartmentalization" that has proven so frustrating to companies trying to move toward customer-centric activity. Clearly, the benefits of timely, complete and accurate customer data integration are powerful and hugely significant.
Becoming Truly Customer Centric
Why is being able to successfully and quickly integrate customer data so tantalizing to businesses trying to become more customer centric? The reason is found in a fundamental marketing maxim: the more you know about your customers, the more easily you can provide the goods and services they're looking for.
Companies moving toward full CRM know that the process of discovering who their best customers are and what they really want begins with customer data integration. With-out a complete picture of a customer's interactions with the organization, it is impossible to generate maximum results.
As our economy has inexorably shifted from a supply- side to a demand-side model, technology - specifically the Internet - has dramatically raised customer expectations and demands. In a recent conference presentation on database marketing strategies, the analyst organization GartnerGroup noted these changes when it said: The breakdown of the traditional business model of mass marketing, mass production and undifferentiated products and services... has been well witnessed and documented. Societal, business, marketing and technology drivers will both enable and propel organizations toward a more customer-centric enterprise.
Fortunately, recent technological breakthroughs in customer data integration now enable companies to conduct accurate and highly responsive operations in a truly customer- focused way.
With the new customer data integration technology in place, customer-centric companies will enjoy a significant competitive advantage over traditional companies. In head-to-head competition, the customer-centric companies will prevail because of their ability to quickly integrate meaningful customer data and then use the findings in their planning, marketing and sales efforts.
Moving from an enterprise-centric to a customer-centric model clearly represents a significant investment for most companies. But if they are serious about their future viability, they really have no choice. And once these companies commit to focusing their operations on their customers, certain facts become quickly evident:
- The decision to change to a customer- centric organization must be adopted throughout the enterprise. CIOs, marketing, sales and accounting executives must join forces to eliminate territorial boundaries over customer data.
- Those in charge of company databases must first leverage leading-edge customer data integration tools to eliminate data isolation and use these resources to create an accurate and single view of each customer.
- Once integrated, a company's IT resources must then be positioned to deliver this single customer view across all CRM applications.
- Ideally, customer data integration must occur in real time to meet the increasing expectations/demands of customers and to take advantage of e-commerce opportunities.
- The customer-centric company should be able to augment its single customer view with additional third-party data to create an even greater understanding of its customers and potential customers.
These are major tasks, but customer data integration technology has advanced significantly with the development and release of a new solution that utilizes the Internet as its delivery vehicle.
Bringing It All Together
In recent months a new high- speed, data-linking technology has demonstrated major step-function improvements in both customer data accuracy and online transaction processing speeds. In fact, this new technology is able to process data at speeds that were previously unthinkable using traditional data warehousing techniques for data cleansing. Because of its accuracy and speed, it constitutes the missing connection between data integration and customer-centric commerce that businesses have sought for so long.
In basic terms, this new technology integrates disparate customer data by assigning a "link" to a customer name and an address. The accuracy of these links is verified from multiple sources within a massive database of accumulated data resources. Once the links are assigned, a single customer view can be quickly established across all databases by simply matching the links.
By accurately integrating customer data, the company using this new technology is able to examine each point of contact that the customer has with its business whether it be online at a Web site, over a toll-free telephone line, in person at a bricks-and- mortar store or all of the above. Data compartmentalization is eliminated. Key insights about the customer that were previously held prisoner within one division's database can now be shared and compared with customer data found in another division of the company. As a result, the enterprise looks at its customer with a single pair of eyes with unmatched certainty and accuracy.
For customers, the relationship with the company now improves. A familiarity now characterizes exchanges between the two. Customers begin to feel that the company knows them and, implicitly, values their individual business.
Furthermore, the new technology offers, for the first time, real-time customer data integration and augmentation. Using an Internet-based data network as a data delivery vehicle, a company can immediately access additional demographic or lifestyle data that can be quickly added to the company's records in real time by simply matching those previously established links.
This linking technology together with the data network makes real- time customer relationship management, or e-CRM, feasible. Using the speed of the Internet to deliver data directly to the point of customer contact, businesses can implement CRM techniques and applications anywhere, including call centers, Web sites and sales desks. As a result, companies can be truly responsive to their customers whenever and wherever interaction occurs.
Real-Time Customer Data Integration
Consider a hypothetical financial services company interested in marketing a new discount brokerage service to selected existing customers and pros-pects through a direct mail promotion.
First, the company uses the new data-matching technology to improve the accuracy of its databases by assigning links and eliminating redundant and inaccurate entries. (Thanks to customer data integration, the financial services company now knows that John Smith and J. Smith and J. B. Smith are the same person, not three different prospects.) In doing so, the company immediately reduces its production and postage costs, and also improves its likely success rate.
With the links established for each name and address, the company also ensures that its other databases reflect these same names and addresses consistently. The company's four, five or ten databases now function effectively together as a single, powerful information resource.
Next, the company analyzes the information found in its databases to select those customers and prospects who are most likely to be interested in the new discount brokerage service. To improve the campaign's likelihood of success, the company uses its links to quickly augment its own files with demographic and lifestyle information via the Internet. That way it makes sure that additional strong prospects aren't overlooked.
The company mails its marketing material to targeted customers and prospects, and begins getting inquiries from interested recipients. Some individuals contact the company's call center, while other prospects drop by the company's customer service desks. In both instances, the company's real-time customer data integration capability gives it a substantial competitive advantage. Whether the customer dials in or personally visits a customer service representative, the new data-matching links enable the company to instantly identify the individual via the Internet, tailor a presentation and make much more effective, one-to-one sales presentations.
In both instances, the customer is immediately transformed from an unknown to a known a unique individual with established purchasing preferences. Company representatives can then intelligently tailor their sales presentation to sell, up-sell or cross- sell for maximum effectiveness.
With online e-commerce growing rapidly, this is precisely the type of immediate, responsive service that customers are demanding. Their expectations will continue to grow with each technological advancement. That is why customer data integration technology is so crucial to companies that want to thrive, not merely survive.
Rapid Data Augmentation
Too often, the customer data that a company maintains is inadequate for decision making in areas that are beyond the normal scope of business, such as new product development. With accurate customer data integration links in place, marketers gain real-time, Web-enabled access from their desktops and receive additional information about customers or prospects in just minutes.
This online, real-time data augmentation capability permits companies to make better decisions faster. It gives them a flexibility to quickly take advantage of changing market conditions in ways they could only dream of a few years ago.
Customer Data Integration Makes CRM a Reality
If true customer relationship management is the goal of forward-looking companies, then real-time customer data integration clearly has to be its foundation. A business simply must have immediate access to timely, accurate data if its CRM programs are to be successful.
With their internal databases integrated and functioning as a single information resource, companies will have the ability to understand their customers far better and, consequently, tailor their services more effectively to meet customers' needs.
Since customer expectations of immediate, personalized service are growing rapidly as a result of e-commerce, businesses must match or exceed these service expectations to maintain and acquire market share. Realistically, this can only be done through a real-time, online customer data integration technology.
Companies that fail to take advantage of real- time customer data integration technology simply won't have the ability to respond quickly to changing market trends. Nor will they be able to meet their customers' rising service expectations. Predictably, they will lose market share to businesses that do.
A little knowledge is a dangerous thing. A wealth of knowledge is a profitable thing.
Customer data integration technology represents a quantum leap forward. It offers smart companies a revolutionary opportunity to significantly improve customer acquisition and retention, dramatically enhance customer service, increase customer loyalty and preference, and maximize the lifetime value of each customer. And that's a definite blueprint for success.
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